Under a federal budget plan, retirees still owning their family homes are encouraged to sell and downsize to smaller properties with a $300,000 incentive.
Homeowners who are 65 years old and over selling their house that they’ve resided in for at least 10 years can make a non-concessional contribution of as much as $300,000 into the superannuation with the money earned from the sale.
This incentive covers both members of a couple living in the same home.
The measure is designed to diminish the obstacle to downsizing for retirees, a significant number of whom are living in big homes with extra rooms and costly maintenance expenses.
If these baby boomers sell, there would be more homes that would be available to younger families who are looking to upgrade.
Pushing retirees to live in more suitable homes has long been a big point of contention the affordability issue.
However, the downsizers would have to find a new place to live – whether it’s a laidback rural town near the beach or bushland, or an inner-city bolthole.
Older homeowners are usually unwilling to sell due to sentimental and financial reasons. Selling a home is often expensive and the remaining money after the purchase of a smaller home could then be included in the means test.
This can be a hindrance especially to those whose homes have increased in value significantly over the last decade, in plenty of instances Sydney homes more than doubling in price.
If you are unsure of your circumstances or want to know what your family home is worth, then call me today on 0418 447 856.